Public TV Stations KCET and KOCE to Merge in Shifting Market
After clawing for seven years over the same turf, Southern California's two large public television stations — KCET and KOCE — are merging to become a stronger voice in local broadcasting.
The consolidation, announced Wednesday, will bring together two nonprofit organizations with separate strengths and programming philosophies. KCETLink Media Group, which runs the Los Angeles station, has long enjoyed a prominent profile in the community, but its 2010 decision to sever ties with the national Public Broadcasting Service proved to be a costly blunder.
Orange County's KOCE-TV picked up the PBS affiliation and its award-winning programming and branded itself as PBS SoCal. But over the years, it too has struggled to win acceptance and prime channel locations from pay-TV operators that would enhance its exposure and fundraising might. Both stations have been hampered by lingering confusion in the market about their roles and programming.
"This merger has been in the works for many, many years," said Dick Cook, chairman of KCET's board, who will become chairman of the combined entity when the deal closes this summer. "There is a time and a place for everything, and this is the time, the right moment, for these two great institutions to come together."
The Corporation for Public Broadcasting, which allocates federal dollars to public stations, long had prodded the two stations to unite. That goal made even more sense in an era in which President Trump and some members of Congress have threatened to slash funding for public broadcasting.
Merger talks began three years ago but were put on hold because of the Federal Communications Commission's spectrum auction last year. More than half of the $19.8 billion generated in the auction went to broadcasters that were willing to relinquish some of their spectrum.
KCET, based in Burbank, received about $65 million from the auction, while KOCE collected about $49 million. That money allowed the organizations to fortify their finances and establish endowments for programming.
"That provided a unique opportunity to pay off existing debt and get on a more solid financial footing," said Cook, a former Walt Disney Studios chairman. "It was very important to build a strong financial foundation."
The two stations will fold together their separate assets, with neither side making any payments to the other, the officials said. Andrew Russell, president and chief executive of PBS SoCal (KOCE) will run the combined entity, which will have about 130 employees. No layoffs are immediately planned. KCET has been without a chief executive since February, when Michael Riley joined Ellen DeGeneres' company.
The proposed marriage comes amid a period of frenzied consolidation in commercial television. CBS Corp. and Viacom Inc. are pondering a tie-up; Walt Disney Co. has made a $52.4-billion bid to swallow much of Rupert Murdoch's 21st Century Fox; and telecommunications giant AT&T Inc. has been on an 18-month quest to buy Time Warner Inc., which includes CNN, HBO, TBS, Cartoon Network and the Warner Bros. film and television studio.
TV station chains have been consolidating too. That's because local television stations, even those affiliated with big broadcast networks, are facing head winds as advertisers move their dollars to digital media in search of younger viewers and more-targeted consumers.
Also making headlines has been the conservative-leaning Sinclair Broadcast Group, a Maryland company that already owns more than 190 stations and is seeking regulatory approval to buy Tribune Media, which owns one of Los Angeles' original television stations — KTLA-TV Channel 5. (The Times and KTLA were part of the same company until a 2014 separation.)
Such ownership changes, centralized decision-making and viewership shifts, including the rise of online streaming services, have prompted organizations — including KCET and KOCE — to take stock of their missions and roles in a fast-changing environment.
"We are building something for future generations," Cook said. "And the demand for high-quality storytelling has never been greater — or more important."
KCET and PBS SoCal will remain separate channels available to 18 million residents of metropolitan Los Angeles and will continue to offer different types of programming. The combined company will operate seven broadcast channels, including the free PBS Kids and digital channels.
"This is a merger where there is not a lot of overlap," Russell said. "There are a lot of complementary strengths. We are excited about bringing both stations together and continuing to bring all the programming that people love."
KCET launched in September 1964 and was once a model in public television. It was the second educational television station to go on the air, beginning transmissions just a few months after KUHT in Houston.
For decades, it was part of a core cluster of over-the-air stations in L.A. But after cutting ties with PBS, following a dispute over the fees that KCET had to pay for programming, there were fears that KCET might go out of business. In 2011, the station sold its landmark property — more than four acres on Sunset Boulevard in Hollywood — to the Church of Scientology for an undisclosed sum.
But over time, KCET made the most of its independence and developed its own streaming service. It also began producing in-depth original programs that filled a niche that was all but abandoned by commercial stations.
Last year, for example, KCET produced 54 hours of original content, which the station said boosted its ratings compared with 2016. Fan favorites include KCET's award-winning "SoCal Connected," weekly prime-time newsmagazine.
KCET continues to get mileage from the late Huell Howser's jaunts around the Golden State.
KOCE began broadcasting in November 1972 from Huntington Beach. The station, which was formed by the Coast Community College District, was proud of its Orange County roots at a time when commercial stations were concentrated in Los Angeles, Hollywood and Burbank.
The station's worldview expanded in 2011 when KOCE became the PBS station for Greater Los Angeles and changed its name to PBS SoCal. Almost immediately, the station soared to new heights with the popular "Downton Abbey." It also runs "PBS NewsHour" and "Frontline."
"It's been quite a journey," Russell said. "We've seen great membership growth, and our strength continues to be community service and education."
A 32-person board will oversee the combined entity. It will be composed of 14 members from KCET, 14 members representing KOCE and four new appointees. The two sides said the name of the combined entity would be announced when the merger closes, most likely in July.